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Reprinted  from  The  Annals  of  the  American  Academy  of  Political  and  Social 
Science,  Philadelphia,  November,  1915. 

Publication  No.  949. 

MOV  2 9 1915 


BUDGETARY  PROCEDURE  UNDER  THE  MANAGER 
FORM  OF  CITY  GOVERNMENT 

By  Arch  M.  Mandel, 

1 . . 

Dayton  Bureau  of  Municipal  Research. 

Forty-five  cities  have  at  the  present  writing  adopted  the  com- 
mission manager  form  of  government,  which  is  modeled  upon  the 
organization  of  private  corporations,  and  which  plan,  more  than  any 
other,  it  is  believed  by  its  adherents,  lends  itself  most  readily  to  the 
development  of  an  efficient  administration  of  city  business.  It  is 
logical  and  rational  because  it  recognizes  the  fact  that  managing  a 
municipality  is  a specialized  profession  and  cannot  be  left  to  mer- 
chants, manufacturers  or  mechanics. 

What  have  these  cities  under  the  manager  plan  of  government 
accomplished  in  the  way  of  efficiency  and  economy?  Scanning  a 
list  of  achievements  enumerated  by  Richard  S.  Childs  in  the  July 
number  of  the  National  Municipal  Review , it  is  found  that  Dayton, 
in  1914,  by  an  increase  of  $77,709  in  its  operating  expense  over  the 
year  1913,  gave  $140,000  worth  of  new  service  under  the  new  regime; 
Springfield  reduced  its  operating  expense  by  $50,000,  wiped  out  a 
floating  debt  of  $100,000  and  was  getting  more  service  than  before; 

La  Grande  reduced  $110,000  of  outstanding  warrants  by  $35,000 
during  the  first  year;  Manistee  saved  $20,000  on  a budget  of  $104,000 
and  at  the  same  time  increased  the  service;  Cadillac  reduced  its  ■* 
annual  operating  expense  by  $6,000,  at  the  same  time  improving 
the  service. 

Such  results  give  evidence  not  only  of  adherence  to  the  funda- 
mental principle  in  city  business — keeping  expenditures  within  the 
income — but  also  of  having  planned  expenditures  so  as  to  produce  a 
maximum  of  returns.  In  private  business  the  expenditures  deter- 
mine the  income.  Under  normal  conditions,  every  dollar  spent 
means  a dollar  plus  of  returns.  On  the  other  hand,  the  income  of  a 
city  is  limited  to  a definite  amount,  while  the  needs  as  a rule  seem 
infinite.  It  is,  therefore,  essential  under  these  conditions  to  prepare 
a budget  by  which  one  benefit  can  be  weighed  against  another  and 

1 


■O  39097 


2 


The  Annals  of  the  American  Academy 


the  money  apportioned  according  to  benefits  to  be  derived.  This 
seems  to  have  been  done  by  the  commission-manager  cities,  but 
whether  in  a scientific  manner  or  not  is  another  question.  At  least 
it  was  done  in  an  effective  manner. 

Data  were  received  from  the  following  cities: 


Manistee,  Mich 

Titusville,  Pa 

La  Grande,  Ore 

Abilene,  Kans 

Hickory,  N.  C 

Montrose,  Colo 

Morris,  Minn 

River  Forest,  111 

Dayton,  Ohio 

1 For  current  operating  expenses  only. 


12,381 

$90,453 .00 

8,533 

58,819.79 

4,843 

103,800.00 

4,118 

36,169  00 

3,716 

65,320.00 

3,252 

23,615  .00 

1,685 

37,000.00 

2,456 

20,640.23 

123,800 

1,303, 467.  lll 

Taking  the  budgetary  provision  of  the  charters  as  a basis,  the 
cities  enumerated  above  may  be  divided  into  two  groups — Dayton 
comprising  one  and  the  remaining  cities  the  other.  In  the  cities 
of  the  second  group  the  charters  provide  merely  that  at  a certain 
time  each  year  the  commission  shall  cause  to  be  prepared  or  that 
the  manager  shall  prepare  a list  of  receipts  from  all  sources  and 
detailed  estimates  setting  forth  the  necessary  expenditures  for  all 
purposes  for  the  ensuing  year.  Neither  the  nature  of  the  informa- 
tion desired,  nor  the  extent  of  the  detail  required,  are  specified. 

However,  from  information  gathered,  it  is  found  that  the  city 
managers  base  their  requests  upon  detailed  information  of  expendi- 
tures during  past  and  current  periods.  Furthermore,  because  of 
the  small  size  of  the  cities  and  the  correspondingly  small  amounts 
involved,  the  managers  and  even  the  appropriating  bodies  have 
intimate  and  detailed  knowledge  of  work  done  and  work  proposed, 
of  the  need  and  the  cost.  An  example  of  this  is  furnished  by  Morris, 
Minnesota,  where  “ unit  costs  of  all  work  and  a statement  of  expendi- 
tures are  made  bi-monthly.  The  progress  and  plan  for  all  work  is 
discussed  at  the  weekly  commission  meeting.  ” 

Appropriations  are  made  for  each  department,  without  being 
functionalized  and  not  according  to  a uniform  classification.  Al- 
though the  budgets  are  unscientific  in  form,  they  seem  to  work  out 
satisfactorily  in  practice.  In  formulating  the  budget,  the  executive 


Budgetary  Procedure 


3 


in  every  instance  obtains  all  the  information  necessary  for  the 
presentation  of  sound  estimates  and  intelligent  recommendations. 

It  is  evident  from  the  results  achieved  that  not  only  was  an 
adequate  relationship  between  receipts  and  expenditures  established 
and  maintained,  but  that  expenditures  were  made  according  to  a 
well  considered  program.  While  such  informal  methods  apparently 
proved  satisfactory  from  an  administration  standpoint  and  did  not 
hinder  willing  officials  from  operating  efficiently,  it  must  be  remem- 
bered that  city  officials  are  not  alone  interested  in  the  budget.  The 
public  also  is  vitally  interested  in  how  its  money  is  being  spent  and 
it  is  therefore  incumbent  upon  those  preparing  the  budget  to  present 
to  the  public  in  a concise  and  clear  manner  such  statements  as  will 
assist  the  layman  in  comprehending  intelligently  how  and  why 
funds  are  being  apportioned  in  the  specific  manner  in  which  they 
are.  Comparative  summaries  of  receipts  and  expenditures  of  past 
and  current  periods  should  be  prepared,  the  financial  status  should 
be  explained  through  a debt  statement  and  balance  sheet,  and  appro- 
priations should  be  made  in  such  manner  as  to  make  clearly  evident 
the  definite  purposes  for  which  the  funds  will  be  spent.  This  in- 
formation is  essential  for  efficient  financial  control  in  small  as  well 
as  large  cities. 

Dayton,  Springfield,  and  Sandusky  operate  under  similar  budg- 
etary provisions  in  their  charters,  but  because  of  the  size  of  the 
city  and  the  fact  that  all  department  heads  are  appointed,  by  the 
manager,  the  success  or  failure  of  Dayton’s  government  has  a special 
significance  and  its  budget  is  of  a correspondingly  peculiar  interest. 
In  the  smaller  municipalities,  where  the  managers  know  every 
minute  of  the  day  the  status  of  all  activities,  noteworthy  economy 
seems  to  have  been  effected  even  with  unscientific  budgets.  In 
Dayton,  however,  with  a budget  of  $1,303,000  for  current  operation 
only,  the  manager  cannot  without  a formal  system  of  budgetary 
procedure  determine  intelligently  the  amounts  necessary  for  the 
various  functions,  nor  can  he  without  a functionalized  work-pro- 
gram judge  the  efficiency  of  his  department  heads.  Furthermore, 
a painstaking  and  concise  exposition  of  the  finances  of  the  city 
must  be  made  for  the  information  of  the  public. 

Prior  to  January  1,  1914,  under  the  federal  plan  of  government, 
Dayton  operated  under  an  inadequate  and  unscientific  budget  and 
the  result  was  government  by  deficit.  Twice  a year,  the  finance 


4 


The  Annals  of  the  American  Academy 


committee  of  the  council  prepared  a six  months’  budget  based  upon 
requests  from  department  heads.  These  requests  were  not  suffi- 
ciently detailed,  nor  did  they  contain  adequate  supporting  data  of 
past  expenditures  to  substantiate  the  new  demands.  The  finance 
committee  based  its  recommendations  upon  the  last  appropriations 
without  knowing  how  efficiently  the  money  was  spent,  and  council 
then  made  its  appropriations  in  more  or  less  aggregate  sums.  These 
appropriations  were  not  necessarily  kept  within  the  estimated  in- 
come and  as  a result  for  six  successive  years  a deficit  of  $60,000  per 
year  was  created.  Public  hearings  upon  the  budget  were  not  held. 

Since  January  1,  1914,  Dayton  has  been  operating  under  a 
commission  manager  charter  of  which  the  provisions  governing  the 
appropriations  are  as  follows: 

The  fiscal  year  of  the  city  shall  begin  on  the  first  day  of  January.  On  or  before 
the  first  day  of  November  of  each  year  the  city  manager  shall  submit  to  the  city 
commission  an  estimate  of  the  expenditure  and  revenues  of  the  city  departments 
for  the  ensuing  year.  This  estimate  shall  be  compiled  from  detailed  information 
obtained  from  the  several  departments  on  uniform  blanks  to  be  furnished  by  the 
manager.  The  classification  of  the  estimate  of  expenditures  shall  be  as  nearly 
uniform  as  possible  for  the  main  functional  divisions  of  all  departments,  and  shall 
give  in  parallel  columns  the  following  information: 

а.  A detailed  estimate  of  the  expense  of  conducting  each  department  as 
submitted  by  that  department. 

б.  Expenditures  for  corresponding  items  for  the  current  fiscal  year,  including 
adjustments  due  to  transfers  between  appropriations  plus  an  estimate  of  expendi- 
ture necessary  to  complete  the  current  fiscal  year. 

c.  Expenditures  for  corresponding  items  for  the  last  two  fiscal  years. 

d.  Amount  of  supplies  and  materials  on  hand  at  the  date  of  the  preparation 
of  the  estimate. 

e.  Increase  or  decrease  of  requests  compared  with  the  corresponding  appro- 
priations for  the  current  year. 

/.  Such  other  information  as  is  required  by  the  commission  or  that  the  city 
manager  may  deem  to  be  advisable  to  submit. 

g.  The  recommendation  of  the  city  manager  as  to  amounts  to  be  appropriated 
with  reasons  therefor  in  such  detail  as  the  commission  may  direct. 

It  is  realized  that  the  wording  of  the  above  section  which  pro- 
vides that  the  “ classification  shall  be  as  nearly  uniform  as  possible 
for  the  main  functional  divisions  of  the  departments”  is  no  longer 
applicable,  and  should  read  “shall  be  uniform  for  the  main  func- 
tional divisions.  . . . ” In  practice  the  latter  interpretation 

is  carried  out. 

The  Dayton  budget  for  1915  does  not  include  a program  for 


Budgetary  Procedure 


5 


permanent  improvements  to  be  paid  out  of  bonds,  but  except  for 
this  phase  it  is  complete  and  according  to  scientific  standards  of 
budget  procedure.  Based  upon  a detailed  estimate  of  revenue  from 
all  sources  except  bond  sales,  appropriations  are  made  in  accordance 
with  a uniform  classification  of  expenditures  for  each  functional 
division. 

The  following  sections  go  to  make  up  the  1915  budget: 

Classification  of  expenditures; 

Estimated  income  by  source; 

Summary  of  expenditures  by  objects  purchased; 

Summary  of  expenditures  by  organization  units  and  according  to  objects 
purchased; 

Appropriation  ordinance  including  detailed  appropriations  to  each  function, 
in  accordance  with  a uniform  classification. 

All  the  receipts  of  the  city  coming  from  taxes  and  miscellaneous 
sources  go  into  one  fund  called  the  general  fund.  From  this  fund 
all  appropriations  are  made  to  each  departmental  division,  by  char- 
acter of  expenditure,  which  is  divided  into  two  main  groups, — 
current  operation  and  capital  outlay.  Under  each  of  these  groups 
appropriations  and  allotments  are  made  in  accordance  with  the 
following  classification: 

A . Personal  Service 

Personal  service  is  direct  labor  of  persons  in  the  regular  or  temporary  employ- 
ment of  the  corporation. 

1.  Salaries. 

2.  Wages. 

B.  Contractual  Services 

Contractual  services  are  activities  performed  by  other  than  municipal  de- 
partments, under  expressed  or  implied  agreement,  involving  personal 
service  plus  the  use  of  equipment  or  the  furnishing  of  commodities. 

1.  Communication. 

2.  Contractual  Repairs. 

3.  Hire  of  Equipment. 

4.  Insurance. 

5.  Public  Utility  Services,  N.  O.  S. 

6.  Special  Service. 

7.  Traveling. 

8.  Other  Contractual  Services. 

C.  Sundry  Charges 

Sundry  charges  include  those  outlays  legally  or  morally  obligatory  upon  the 
city  as  a public  corporation  and  trustee. 

1.  Contributions. 

2.  Debt  Service. 


6 


The  Annals  of  the  American  Academy 


3.  Depreciation. 

4.  Imprest  Cash. 

5.  Pensions. 

6.  Refunds  and  Claims. 

7.  Taxes. 

D.  Supplies 

Supplies  are  commodities  of  a nature  which  after  use  show  a material  change 
in,  or  an  appreciable  impairment  of,  their  physical  condition;  and  instru- 
ments liable  to  loss,  theft,  and  rapid  depreciation. 

1.  Chemicals,  Drugs,  and  Medicines. 

2.  Clothing,  Dry  Goods,  and  Notions. 

3.  Food  Products. 

4.  Forage. 

5.  Fuel. 

6.  Minor  Instruments. 

7.  Oils  and  Lubricants. 

8.  Stationery. 

9.  Other  Supplies. 

E.  Materials 

Materials  are  commodities  of  a permanent  nature, — in  a raw,  finished  or 
unfinished  state, — entering  into  the  construction,  renewal,  replacement 
or  repair  of  any  land,  building,  structure  or  equipment. 

1.  Lumber. 

2.  Machine  and  Metal  Materials. 

3.  Masonry. 

4.  Paints,  Oils,  and  Glass. 

5.  Other  Materials. 

F.  Equipment 

Equipment  comprises  the  live  stock,  furniture,  machinery,  implements, 
vehicles,  and  apparatus  necessary  and  useful  in  the  operation  of  the  cor- 
poration, and  which  may  be  used  repeatedly, without  appreciable  impair- 
ment of  their  physical  condition,  having  a calculable  period  of  service. 

1.  Furniture  and  Furnishings. 

2.  Live  Stock. 

3.  Machinery  and  Implements. 

4.  Motor  Vehicles. 

5.  Vehicles  and  Harness. 

6.  Miscellaneous. 

G.  Lands,  Buildings , and  Structures , — By  Purchase 

Supplies  are  classified  according  to  the  nature  of  the  goods 
and  not  according  to  the  use  to  which  they  might  be  put;  for  in- 
stance, gasoline  is  listed  under  oils  and  not  under  fuel. 

The  appropriation  ordinance,  which  has  been  found  satis- 
factory for  the  past  two  years,  is  as  follows: 


Budgetary  Procedure 


7 


AN  ORDINANCE 

To  make  the  general  appropriations  for  the  year  1915. 

Whereas,  It  is  necessary  in  order  to  provide  for  the  immediate  preservation 
of  the  public  peace,  property,  health  and  safety,  and  to  provide  for  the  usual 
daily  operations  of  the  municipal  departments  that  the  general  appropriations 
for  the  year  1915  be  made  at  once: 

Be  it  ordained  by  the  Commission  of  the  City  of  Dayton: 

Section  1.  That  there  shall  be  and  hereby  is  appropriated  out  of  any 
moneys  in  the  treasury,  or  any  accruing  revenues  of  the  city  available  for  said 
purposes,  the  sums  of  money  set  forth  in  the  column  marked  “Appropriations” 
for  the  various  purposes  hereinafter  specified  for  the  payment  of  all  expenses  and 
obligations  of  the  city  during  the  year  1915.  The  positions  designated  herein  are 
hereby  created  and  the  rate  of  wages  or  price  per  unit  of  any  of  the  items  herein- 
after set  forth  shall  not  be  greater  than  that  indicated.  Any  additions  to  salary 
or  wage,  or  the  creating  of  new  positions  shall  be  by  ordinance.  Each  depart- 
ment shall  limit  its  expenditures  for  the  various  purposes  set  forth  in  the  ordinance 
to  the  amounts  appearing  in  the  columns  marked  “Expense”  unless  the  City 
Manager  shall  expressly  authorize  a transfer  from  one  schedule  to  another.  The 
amounts  appropriated  for  the  various  purposes  hereinafter  set  forth  shall  in  no 
event  be  exceeded  unless  by  specific  authority  of  the  Commission,  by  ordinance, 
authorizing  a transfer  from  one  fund  to  another. 

All  books  of  accounts,  warrants,  orders  and  vouchers,  or  other  official  refer- 
ence to  any  appropriation,  shall  indicate  the  appropriated  fund  involved  or  to  be 
drawn  upon  by  the  code  number  set  forth  in  the  column  marked  “Code”  as  herein- 
after set  forth. 

A typical  section  of  the  detailed  appropriation  to  a functional 
sub-division  is  as  follows: 


DEPARTMENT  OF  SERVICE 


Division  of  Water 


Bureau  of  Pumping  and  Supply 

Expense 

Personal  Service 


80  A 1 Salaries 

Schedule 

Chief  Engineer  (1) 

. . $1,800  per  yr 

$1,800.00 

Engineers  (3) . . . . 

. . . 1,350  per  yr 

4,050.00 

Firemen  (3) 

900  per  yr 

2,700.00 

Oilers  and  Wipers  (3)  1,095  per  yr 

3,285.00 

Janitor  (1) 

80  A 2 Wages 

900  per  yr 

900.00 

Boiler  Cleaners  (3)$3 . 00,  313  days 
Steamfitter  and 

$939.00 

machinist 

4.40,  313  days 

1,377.20 

Laborers 

2 .00, 1,760  days 

3,520.00 

Appropria- 
Expenae  tiona 


$12,735.00 


5,836.20  $18,571.20 


8 


The  Annals  of  the  American  Academy 


Contractual  Services 

81  B 2 Contractual  Repairs $2,500.00 

81  B 5 Public  Utility  Service,  N.  O.  S 10,000.00 

81  B 6 Special  Service 1,200.00  13,700.00 

Supplies 

82  D 1 Chemicals,  Drugs  and  Medicines ... . $250.00 

82  D 2 Clothing,  Dry  Goods  and  Notions.  . . 100.00 

82  D 5 Fuel 18,000.00 

82  D 6 Minor  Instruments 500.00 

82  D 7 Oils  and  Lubricants 2,000.00 

82  D 8 Stationery 50.00 

82  D 9 Other 50.00  20,950.00 

Materials 

83  E 2 Machine  and  Metal  Materials $900.00 

83  E 4 Paints,  Oils  and  Glass 50.00 

83  E 5 Other 200.00  1,150.00 

Capital  Outlay 

Equipment 

84  F 3 Machinery  and  Implements 250.00 


Total $54,621.20 


While  funds  are  appropriated  in  great  detail  for  specific  pur- 
poses, the  appropriation  ordinance  provides  sufficient  flexibility  for 
practical  purposes.  Without  going  into  the  advantages  or  disadvan- 
tages of  a functionalized  budget  the  fact  remains  that  for  Dayton, 
its  budget  worked  and  proved  effective  for  control  of  expenditures. 
Merely  with  the  consent  of  the  manager  a department  head  may 
interchange  funds  freely  within  the  column  marked  “Expense” — 
as  for  example,  the  manager  may  authorize  transfers  from  code  82 
D 1 to  82  D 7,  etc.,  but  to  make  a transfer  from  one  appropriation 
to  another,  as  from  code  81  B 5 to  82  D 1 the  authorization  of  the 
commission  is  necessary.  Thus  though  allowing  adequate  flexibility, 
a positive  control  over  the  budget  is  retained  by  the  manager. 

In  addition  to  the  above  mentioned  sections  comprising  the 
budget,  there  remains  collective  and  supporting  data  not  incor- 
porated but  which  is  furnished  the  manager  and  the  commission,  and 
informs  them  of  the  work  done  and  the  cost  of  operating  the  various 
functions  of  the  community. 

The  method  employed  in  Dayton  for  preparing  the  budget  is 
the  same  as  that  in  other  similarly  governed  cities.  The  manager 
receives  the  estimates  from  the  departments  on  uniform  sheets  fur- 
nished by  him.  These  estimates  are  gone  over  by  him  with  the 


Budgetary  Procedure 


9 


respective  department  heads,  at  which  time  definite  data  in  the 
form  of  records  must  be  submitted  to  the  manager  before  he  recom- 
mends amounts  to  be  allowed  by  the  commission.  Before  submit- 
ting his  budget  to  the  city  commission,  the  manager  has  reduced  the 
total  request  to  within  the  estimated  income  for  that  year.  The 
commission  then  reviews  the  budget  with  the  manager,  receives  his 
explanation  for  the  recommendations  made  and  makes  such  changes 
as  it  sees  fit.  It  may  be  noted  that  in  Dayton,  except  for  a few 
minor  revisions  after  discussions  at  the  public  hearings,  the  budget 
was  passed  practically  as  the  manager  recommended. 

The  effectiveness  of  the  Dayton  form  of  budget  and  the  control 
over  funds  which  it  affords  was  demonstrated  in  1914,  when  the 
manager  was  able  by  following  the  budget  to  turn  a probable  defi- 
ciency into  an  actual  surplus  at  the  end  of  the  year.  In  June,  due 
to  a threatened  shrinkage  in  receipts,  the  departments  were  notified 
that  a reduction  in  appropriations  might  be  necessary.  Immediately 
upon  receiving  the  final  returns  from  taxes  for  the  year,  on  August 
31st,  cuts  in  the  budget  were  made  amounting  to  $45,000.  This 
reduction  in  appropriations  was  made,  however,  in  sufficient  time 
to  allow  of  a revision  of  the  work-program  of  the  several  depart- 
ments, and,  without  having  eliminated  any  major  functions,  or  dis- 
charged any  employe,  resulted  at  the  close  of  the  year  in  a balance 
of  $5,600  remaining  in  the  treasury.  This  presents  a significant 
contrast  to  conditions  under  the  old  regime,  when  for  a succession 
of  six  years  an  annual  deficit  of  $60,000  was  incurred  and  the  police 
and  fire  departments  were  reduced  in  numbers,  all  because  a prop- 
erly classified  budget  and  adequate  accounting  to  supplement  such 
budget  were  lacking. 

For  1916,  it  will  be  recommended  that  the  budget  of  Dayton 
be  elaborated  in  accordance  with  the  procedure  proposed  for  New 
York  City  by  the  New  York  Bureau  of  Municipal  Research,  and 
which  has  been  adopted  with  modifications  by  Springfield,  Mass., 
upon  the  recommendation  of  its  local  Bureau  of  Municipal  Research. 
The  plan  calls  for  the  following: 

1.  An  explanatory  text  by  the  city-manager  explaining  new  features  neces- 
sitating requests  for  funds. 

2.  A financial  program  with  a resolution  fixing  the  revenue. 

3.  An  appropriation  ordinance  prepared  in  the  form  in  which  the  city-man- 
ager desires  it  to  be  passed. 


10 


The  Annals  of  the  American  Academy 


4.  Supporting  data  consisting  of 

Summaries  of  financial  statements,  comprehending 
Balance  sheet 
Operating  account 
Surplus  account 
Debt  statement 
Fund  statement 

Summaries  of  estimates,  comprehending 

Comparative  summary  of  actual  and  estimated  revenues,  showing  actual 
revenues  for  the  past  two  years  and  estimated  revenues  for  the  next 
ensuing  year. 

Comparative  summary  of  actual  and  estimated  expenditures,  showing 
actual  expenditures  for  the  past  two  years,  and  estimated  expenditures 
for  the  next  ensuing  year,  classified  by 
“Organization  units” 

“Functions”  or  kinds  of  activity 
“Objects  of  expenditure”  or  things  purchased 
“Character  of  expenditure”  distinguishing  expense  from  capital 
outlay,  fixed  charges,  and  contingencies  and  losses 
“Funds”  or  classes  of  funds  to  be  charged. 

Supporting  detailed  schedules  of  estimates,  comprehending 

Detailed  analysis  of  comparative,  actual  and  estimated  revenues  classi- 
fied according  to 

Character  or  method  of  raising 
Organisation  units  in  which  they  occur 

Scientific  budgets  are  not  inherent  to  the  commission  manager 
form  of  government,  but  this  scheme  of  government  is  constitution- 
ally the  most  conducive  to  the  promulgation  of  a logical  budget. 
The  fiscal  policy  is  an  executive  problem.  The  executive  is  respon- 
sible for  the  proper  functioning  of  the  various  city  departments,  and 
it  is  to  him  that  the  success  or  failure  of  an  administration  is  accred- 
ited. It  is  his  duty  to  plan  the  work  to  be  carried  on  and  it  is 
within  his  province  to  know  what  funds  are  necessary  for  the  proper 
execution  of  his  plans.  To  the  executive,  therefore,  should  be 
granted  the  power  to  initiate  financial  measures,  and  to  the  legisla- 
tive body  should  remain  the  duty  of  authorizing  funds  and  holding 
the  executive  accountable  for  results  proportionate  to  the  expendi- 
ture of  funds. 

Such  a state  of  affairs  has  not  been  easy  of  attainment  under 
the  federal  plan  of  government  prevalent  in  American  cities. 

Dayton’s  condition  prior  to  January  1,  1914,  is  typical  of 
that  to  be  found  in  hundreds  of  cities  today.  Under  a modified 
form  of  the  federal  plan,  members  of  council,  the  mayor,  auditor, 


Budgetary  Procedure 


11 


treasurer  and  solicitor  were  elective  officials.  The  heads  of  the 
departments  of  public  service  and  public  safety  were  appointed  by 
the  mayor,  as  were  the  members  of  the  Park  Board  and  Board  of 
Health. 

The  budget  was  made  up  by  the  finance  committee  of  council, 
from  estimates  submitted  to  them  independently  by  each  depart- 
ment head.  This  committee  conducted  hearings  with  the  city 
officials,  and  in  it  resided  the  power  to  determine  what  salary 
increases  should  be  granted,  and  what  the  work  program  for  the 
ensuing  year  should  be.  The  tentative  budget  was  then  presented 
to  council  which  passed  it,  without  inquiring  further  into  the  merits 
of  the  appropriations,  except  to  assure  themselves  that  favorite 
sons  were  receiving  the  salary  increases  and  that  their  respective 
districts  would  be  benefited  to  some  extent.  In  other  words,  the 
legislative  body  of  the  government  controlled  administrative  prob- 
lems. 

The  mayor,  who  was  supposed  to  be  the  head  of  the  city  and 
responsible  for  the  administration  of  affairs  during  his  term  of 
office,  could  exercise  no  positive  judgment  in  the  formation  of  the 
budget.  Council  as  well  as  most  of  the  other  officials  were  directly 
responsible  to  the  electorate  and  unless  all  happened  to  belong  to 
the  same  political  party  no  incentive  for  cooperation  existed.  In 
fact  as  was  the  case  in  Dayton  for  two  years  prior  to  the  inaugura- 
tion of  the  commission-manager  government,  there  was  continuous 
discord  and  strife  between  the  executive  and  legislative  departments 
because  of  a difference  in  political  faith.  Accusations  of  discrimi- 
nation against  the  mayor’s  departments,  whether  just  or  unjust, 
were  frequent,  the  mayor  did  not  attend  the  meetings  of  council  and 
was  not  present  at  budget  hearings  unless  specially  invited.  Need- 
less to  state  the  invitations  were  neither  numerous  nor  urgent. 

Coupled  with  these  conditions,  which  are  products  of  the 
federal  form  of  government,  is  the  difficulty  of  allocating  respon- 
sibility for  inefficient  administration.  The  blame  is  shifted  from 
the  executive  to  the  legislative  branch  and  vice  versa,  with  the 
result  that  no  intelligent  judgment  can  be  formed  by  the  citizen- 
body. 

Although  partisan  bickering  and  diffusion  of  responsibility  are 
largely  eliminated  in  the  straight  commission  plan,  yet  this  form  of 
government  does  not  lend  itself  readily  to  a scientific  budget  pro- 


12 


The  Annals  of  the  American  Academy 


gram.  The  fundamental  drawback  of  this  plan  of  government  is  the 
combined  administrative  and  legislative  powers  vested  in  the  same 
body.  The  commission  initiates  and  executes  measures  and  is  judge 
of  the  results  accomplished.  It  votes  itself  appropriations  upon  data 
satisfactory  to  itself  and  controls  expenditures  made  by  itself. 
Disinterested  regulation  is  precluded. 

Furthermore,  each  commissioner,  being  an  administrative  head, 
is  vitally  interested  in  the  success  of  his  particular  department 
and  in  the  amount  of  money  appropriated  for  his  use.  He  will  bend 
every  effort  to  secure  funds  adequate  for  the  production  of  good 
results,  and  to  bring  this  about  it  will  frequently  be  found  necessary 
to  resort  to  log-rolling  and  combining  with  certain  of  the  members 
of  the  commission  against  the  remainder. 

Contrasted  to  both  of  these  types  of  city  government  is  the 
commission  manager  plan,  where  the  manager  is  the  head  of  the 
administrative  phase  of  the  government  and  alone  responsible  for 
the  operation  of  the  various  departments.  He  receives  the  budget 
estimates  from  all  the  departments  and  by  virtue  of  his  powers  can 
demand  adequate  information  to  substantiate  the  requests.  These 
estimates  with  his  recommendations  and  supporting  data  are  pre- 
sented to  the  commission,  which  after  conferences  with  the  city 
manager  and  public  hearings,  makes  the  appropriations. 

Log-rolling  and  personal  consideration  in  appropriating  funds 
are  precluded  under  this  system.  The  manager  is  accountable  to 
the  commission  for  the  successful  administration  of  the  affairs  of 
every  department;  one  function  cannot  be  sacrificed  to  another,  and 
everything  being  equal  he  will  recommend  appropriations  to  the 
relative  urgency  and  importance  of  the  work  to  be  done.  The 
commission  is  disinterested  in  so  far  as  the  individual  departments 
are  concerned  and  no  commissioner  is  identified  with  any  particular 
subdivision  of  the  city  government.  Being  accountable  as  a whole 
to  the  electorate  for  an  efficient  administration  of  all  the  depart- 
ments, the  commission  will  apportion  funds  in  such  manner  as  to 
produce  the  most  desirable  results  for  the  community  considered  as 
a unit. 

The  possibility  of  sacrificing  judicious  appropriations  because 
of  friction  between  the  legislative  and  executive  branches  is  elimi- 
nated because  the  continued  employment  of  a city  manager  signifies 
harmonious  relationships  between  him  and  at  least  a majority  of 
the  commission. 


Budgetary  Procedure 


13 


By  having  the  department  heads  responsible  to  him  and  remova- 
ble by  him,  the  city  manager  controls  expenditures.  Frequent 
cabinet  meetings  such  as  are  held  in  Dayton  and  reports  of  current 
appropriation  balances  enable  the  manager  to  keep  in  close  touch 
with  the  progress  of  the  work  and  with  the  adequacy  of  funds.  He 
is  then  in  a position  to  make  curtailments  and  to  recommend  in- 
creases as  the  occasion  presents  itself. 

While  the  commission  manager  plan  seems  to  be  the  best 
medium  for  efficient  administration  in  city  government,  material 
progress  can  be  made  only  through  the  continued  interest  in  public 
affairs  by  the  citizen-body.  The  increased  purchase  value  of  the 
public  dollar  in  the  commission  manager  cities  is  the  outcome  of 
placing  responsibility  for  spending  the  money,  on  one  man,  to  whom 
the  public  turns  for  results.  Such,  at  least,  is  the  case  in  Dayton 
where  as  never  before  are  the  acts  of  the  city  officials  being  fol- 
lowed. As  soon  as  the  public  demands  to  know  where  the  money  is 
coming  from  and  how  and  why  it  is  being  spent,  budgets  will  be 
gotten  up  and  the  information  needed  to  interpret  budgets  intelli- 
gently will  be  supplied. 

Recent  events  point  to  just  such  developments  in  city  govern- 
ment. The  injection  of  the  business  man  into  municipal  affairs,  the 
strengthening  conviction  that  administering  a city  is  a specialized 
business  and  requires  specialists,  the  growing  conception  that  city 
business  is  a matter  of  dollars  and  cents  and  not  of  bosses  and  _ 
parties,  will  all  contribute  to  the  dispersion  of  the  air  of  mystery 
which  has  surrounded  municipal  government  and  to  the  introduction 
of  those  methods  which  have  made  private  business  in  this  country 
so  eminently  successful. 


